Class B Industrials Bring Foreign Investors To Chicago

Orig Post | Re-Post Cawley Chicago 4/14/16


CHICAGO—Westmount Realty Capital, LLC and Partners Group have just purchased an industrial portfolio of 19 multi-tenant, light industrial assets, mostly around O’Hare Airport and totaling about 1.5 million square feet, on behalf of their clients. It’s the group’s second big industrial purchase in the metro area, and a good indicator of the region’s strength and desirability.

“We are a strong believer in Chicago, especially when it concerns industrial properties near the airport,” Clifford Booth, president of Westmount, tells Dallas-based Westmount acquired a Chicago-area office/warehouse portfolio with 1.46 million square feet in 2014, and since then a host of the tenants have expanded operations and taken up more space. “We’ve seen the vibrancy in this marketplace.”

As reported in, Westmount also recently bought a big portfolio in the Milwaukee area. “We do like the Midwest, although not exclusively,” Booth explains. The company has a significant amount of property in both Atlanta and its home town of Dallas. Booth says it may be the Dallas connection which lets Westmount “understand what drives cities that are non-coastal.”

Of the new portfolio, 14 of the properties sit near O’Hare International Airport and the other five are in Romeoville, Gurnee and Wheeling. Booth says the area close to O’Hare is geographically desirable, without vacant land and only limited new construction. The well-maintained buildings are of varying sizes and tenants currently occupy 86% of the portfolio. Westmount and Partners formed a joint venture to acquire the Chicago properties from a large, institutional owner of industrial real estate.

Ron Lamontagne, managing director of the Switzerland-based Partners, adds that he sees “tremendous opportunity in the US industrials sector, especially in locations that act as regional logistics hubs, like Chicago. This portfolio is ideally positioned to benefit from the uptick in logistics and light industrial demand and offers us several value creation opportunities.”

Although the A market is also very strong in the Chicago area, Booth says that Westmount is “primarily a ‘B’ quality buyer. ‘A’ buildings are far more aggressively priced and can’t hit the returns we’re looking for.”

Furthermore, “there is a certain vibrancy in the ‘B’ sector.” When he compares the two classes of buildings, Booth sees “many more tenants in the marketplace that are looking to lease ‘B’ buildings than there are ones looking at ones considered ‘A.’”

Westmount will provide local property management services to its combined 3 million square foot, 27 building portfolio through its new Chicago office. Cawley Chicago will provide leasing services to the combined portfolio.


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